Accounts Payable Automation includes the technology used by accounting teams to eliminate error-prone tasks in the accounts payable process by automating them. The technology used in AP Automation automates the steps such as a receipt, coding of invoices, payment, and reconciliation. This automation process eliminates the need to input data manually.
AP Automation has revolutionized the process of invoices in business by digitalizing them using accounts payable software. AP automation software provides the dashboard and analytic tools to submit and approve invoices digitally. In the business, it is essential to make sure that invoices are paid on time without errors. Also, business owners are worried to improve accounts payable operations and generate revenue. To overcome these issues, the AP automation process becomes popular to ensure the process, approval, and payment of invoices on time to keep the business moving.
Before understanding the working of AP Automation, it is necessary to know the accounts payable deeply. In simple words, Accounts payable are liabilities to manage the company's operations and cash flow. It is the money or everything owed by the company to its creditors or suppliers.
Accounts payable includes the due payment of services, goods, supplies, or money from suppliers, merchants, or other companies. The accounts payable balance is shown on the company's balance sheet and the company's AP department is responsible for making due payments. Also, taxes and loans come in the category of accounts payable.
How does AP Automation Work?
Accounts Payable Automation is a process that makes payments for each credit due digitally. It is done by a touchless process using AP Automation Solution. In this process, all the invoices can be processed 100% automatically without any error and human intervention.
AP Automation software uses Optical Character Recognition (OCR) Technology which combines both machine learning (ML) and artificial intelligence (AI) software to extract information and automate the process of invoices. First of all, AP Automation software converts vendor invoices (pdf, paper, XML, etc.) into a standard digital format. AP Automation can process both expense-based invoices and supplier-based invoices.
Then, the digital workflow does coding, approving invoices, matching the invoices to respective purchase orders. After the invoice verification and approval, payments are done automatically by ERP. All the electronic invoices are archived securely and one can find them anytime anywhere. Moreover, there is an option to set up automated Emails to remind pending payments and approvals. This touchless process has introduced digital modern automation technology to the AP process. Many businesses are using this technology to increase operational efficiency and employee satisfaction.
Why is Accounts Payable Automation important?
There are many reasons to automate accounts payable. This is important for small or large businesses in various terms. Because Accounts Payable should not be costly or inefficient. Rather, they should be automated and rewarding. AP Automation reduces your processing cost by eliminating the need for manual input.
Defaulting the accounts payable process can seriously affect the business. Moreover, your company will not need to hire more people for the accounts payable department. Because AP automation can make the payments faster and smoother.
What are the Benefits of AP Automation?
This touchless process has several clear benefits. Therefore, it is becoming popular in business because of its efficiency and effectiveness. Let's take a look at AP Automation process benefits and how can it help to grow your business. Let's begin!
By eliminating the manual process of invoices, checking PO (purchasing orders), entering data, the AP automation system saves considerable time by doing all these processes instantly. It minimizes the need for human intervention and makes invoice processing and approval faster.
AP automation increases accuracy by eliminating the mistakes done by humans in manual work. The automation process detects errors and corrects them before payment submission. Also, it digitizes the documents by default which is easier than scanning or mailing them.
AP Automation process can significantly cut down the processing and labor costs and help in saving business money and resources. Moreover, it also eliminates the cost involved in invoice production, files storage, postage, etc.
One of the significant benefits of Accounts Payable Automation is that payments are done automatically on an authorized date. This automation process prevents late fees that include penalties caused by late payments. Payment information is recorded automatically or you can set the date for recurring payments.
Provides Greater Visibility
Through the online automation network, the company can track the invoices from a dashboard. It provides greater visibility and transparency of the invoice process. Moreover, it is easier to check missing or duplicate payments. Also, there is less fraud in the AP automation process because all the payments are handled digitally by software.
In a Nutshell
Invoice processing is one of the crucial processes in business operation and the AP automation process has made it easier and efficient. This touchless process has revolutionized the accounts payable process. Also, it plays a key role in business growth by generating more revenue.